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FXStreet reports that Daniel Ghali, a commodity strategist at TD Securities, advises how to trade gold in the current risk-on regime. He notes that a positioning squeeze is on the cards as the yellow metal becomes a crowded trade.

“We have argued that gold is in the midst of a regime change, shifting from a safe-haven into an inflation-hedge asset. As a result, gold prices have increasingly been correlated to risk assets. This is driven by common drivers impacting both risk assets and gold – namely, the surge in liquidity that has driven both risk assets and gold higher, as capital shelters itself from negative real yields in risk and real assets.” 

“A decomposition of the themes driving trading decisions reveals that macro themes, such as inflation expectations, have driven an increase in length, particularly as prices broke through resistance levels. Importantly, risk-on has had a limited impact on positioning, and has been positively correlated with length on average over the last month. Waning momentum has been the largest hurdle for an increase in length.”

“Insofar as this regime is driven by real-rate suppression, money managers need not be concerned about trading gold in a risk-on environment. However, while we see no extremes in positioning, gold is becoming a crowded trade, raising the risk of a positioning squeeze should these themes be adversely affected.”

Canada’s manufacturing sales climb more than anticipated in May

Statistics Canada released its Monthly Survey of Manufacturing on Wednesday, which showed that the Canadian manufacturing sales surged 10.7 percent m-o-m in May to CAD40.19 billion, following a revised 27.9 percent m-o-m plunge in April (originally a 28.5 percent m-o-m drop. the largest on record), as many manufacturers resumed operations following full or partial shutdowns related to COVID-19 during the previous month. This was the largest increase in manufacturing sales on record.

Economists had forecast a 9.5 percent m-o-m climb for May.

According to the survey, sales increased in 18 of 21 industries, led by transport equipment (+81.7 percent m-o-m) and petroleum and coal products (+18.6 percent m-o-m) industries.

Overall, sales of durable goods industries surged 18.9 percent m-o-m in May, while sales of non-durable goods industries rose 4.4 percent m-o-m.

The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories fell by 7.493 million barrels in the week ended July 10. Economists had forecast a decrease of 2.275 million barrels.

At the same time, gasoline stocks dropped by 3.147 million barrels, while analysts had expected a decline of 0.643 million barrels. Distillate stocks decreased by 0.453 million barrels, while analysts had forecast a build of 1.485 million barrels.

Meanwhile, oil production in the U.S. remained unchanged at 11.000 million barrels a day.

U.S. crude oil imports averaged 5.6 million barrels per day last week, decreased by 1.8 million barrels per day from the previous week.

The Bank of Canada (BoC) left its benchmark interest rates unchanged at 0.25 percent on Wednesday, as widely expected.

In its policy statement, the Canadian central bank noted:

• It is to continue its quantitative easing (QE) program, with large-scale asset purchases of at least $5 billion per week of Government of Canada bonds;
• It stands ready to adjust its programs if market conditions warrant;
• Global and Canadian outlook is extremely uncertain, given the unpredictability of the course of the COVID-19 pandemic;
• Global economy is expected to shrink by about 5 percent in 2020 and then to grow by around 5 percent on average in 2021 and 2022;
• Canadian economy is starting to recover as it re-opens from the shutdowns needed to limit the virus spread;
• Q2 economic activity is estimated to have been 15 percent below its level at the end of 2019;
• Q2 decline in economic activity is considerably less severe than the worst scenarios presented in the April MPR;
• Decisive and necessary fiscal and monetary policy actions have supported incomes and kept credit flowing, cushioning fall and laying foundation for recovery;
• Roughly 40 percent of the collapse in H1 is seen to be made up in Q3, but then economy’s recuperation is expected to slow as the pandemic continues to affect confidence and consumer behaviour and as economy works through structural challenges;
• Real GDP is expected to decline by 7.8 percent in 2020 and resume with growth of 5.1 percent in 2021 and 3.7 percent in 2022;
• Inflation is expected to remain weak before gradually strengthening toward 2 percent as drag from low gas prices and other temporary effects dissipates and demand recovers, reducing economic slack;
• Governing Council will hold policy interest rate at effective lower bound until economic slack is absorbed so that 2-percent inflation target is sustainably achieved;
• To support the recovery and achieve the inflation objective, BoC is prepared to provide further monetary stimulus as needed.

The Federal Reserve reported on Wednesday the U.S. industrial production rose 5.4 m-o-m in June, following an unrevised 1.4 percent m-o-m advance in May.

Economists had forecast industrial production would increase 4.3 percent m-o-m in June.

According to the report, manufacturing output climbed 7.2 percent m-o-m in June, as all major industries posted advances, with the largest gain registered by motor vehicles and parts (+105.0 percent m-o-m). Meanwhile, the output of utilities rose 4.2 percent m-o-m in June and mining production fell 2.9 percent m-o-m.

Capacity utilization for the industrial sector increased 3.5 percentage points m-o-m to 68.6 percent in June. That was 0.9 percentage points above economists’ forecast but 11.2 percentage points below its long-run (1972-2019) average.

In y-o-y terms, the industrial output fell 10.8 percent in June, following a revised 15.4 percent decrease in the prior month (originally a 15.3 percent drop).

For the second quarter as a whole, the industrial production plunged 42.6 percent y-o-y, its largest quarterly decline since the industrial sector retrenched after World War II.

The Labor Department reported on Wednesday the import-price index, measuring the cost of goods ranging from Canadian oil to Chinese electronics, rose 1.4 percent m-o-m in June, following a revised 0.8 percent m-o-m increase in May (originally a 1.0 percent m-o-m gain). That was the largest one-month gain since March 2012. Economists had expected prices to advance 1.0 percent m-o-m last month.

According to the report, the June surge was driven by higher fuel prices (+21.9 percent m-o-m, the largest rise since the index was first published monthly in September 1992), while nonfuel prices (+0.3 percent m-o-m) increased only slightly.

Over the 12-month period ended in June, import prices fell 3.8 percent, due to declines in both fuel (-36.4 percent) and nonfuel (-0.2 percent) prices.

Meanwhile, the price index for U.S. exports also increased 1.4 percent m-o-m in June, following a revised 0.4 percent m-o-m gain in the previous month (originally a 0.5 percent m-o-m rise). This was the largest one-month advance for the index since March 2011.

Prices for both nonagricultural (+1.4 percent m-o-m, the largest monthly advance since March 2011) and agricultural (+1.4 percent m-o-m, the first monthly increase since January) exports contributed to the June advance.

Over the past 12 months, the price index for exports plunged 4.4 percent, reflecting drops in prices of both agricultural (-4.5 percent) and nonagricultural (-4.4 percent) exports.

• Texas, California and Florida accounted for a total of 31,847 new cases on Tuesday, nearly half of all new cases reported across the country
• Cases in the U.S. keep rising, averaging about 62,210 new cases per day over the past seven days - more than triple the number just a month ago and up more than 21% compared with the seven-day average a week ago 
  

USD fell against its major rivals in the European session on Wednesday as more upbeat news regarding potential COVID-19 vaccines bolstered risk sentiment. The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, dropped 0.39% to 95.88.

The U.S. company Moderna (MRNA) announced on Tuesday that its coronavirus vaccine candidate produced antibodies in all patients tested in an initial safety trial. 

ITV political editor reported on Wednesday that the Oxford COVID-19 vaccine is "generating the kind of antibody and T-cell (killer cell) response that the researchers would hope to see".

Reports about progress on coronavirus vaccines sparked a risk-on mood in the markets. However, escalating U.S.-China tensions and lingering fears about the economic impact of the second wave of COVID-19 infections kept optimism in check. 

U.S. President Donald Trump signed an executive order to end Hong Kong's preferential treatment last night, adding that he is not interested in continuing trade negotiations with China's officials at this time.

The situation with coronavirus remains another concern. The U.S. has reported more than 59,000 new cases daily for seven days in a row now. Overall, the U.S. has 3,431,574 cases of COVID-19, the most in the world, according to the Johns Hopkins Center for Systems Science and Engineering. Deaths in the country increased to 136,466, also the most in the world. The total number of confirmed global coronavirus cases rose to 13,323,530 and deaths grew to 578,628.

FXStreet notes that S&P 500 has held key price and 13-day average support, starting at 3144 and stretching down to 3116 to keep the immediate risk higher. Only below 3116/13 would warn a further correction lower, according to analysts at Credit Suisse.

“The S&P 500 yesterday tested and is so far holding what we have flagged as key support, seen starting now at its 13-day exponential average at 3144 and stretching down to last week’s low at 3116 and the subsequent rebound has recovered much of the losses from Monday. With the market also back above its downtrend from February this sees a mild upside bias again in what remains seen as a broader sideways range.”

“Resistance is seen next at 3214, above which can see a move back to 3224, then the 3233/35 highs, with fresh sellers expected here. Above can see a challenge on the bottom of the February ‘pandemic’ gap at 3260.” 

“Support is seen at 3166, then the 13-day average and price support at 3154/44, which we look to try and hold. Only below 3116/13 would mark a top to warn of a more concerted correction lower within the broader range.”

U.S. weekly mortgage applications surge 5.1 percent

The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. rose 5.1 percent in the week ended July 10, following a 2.2 percent advance in the previous week.

According to the report, refinance applications climbed 11.9 percent, while applications to purchase a home dropped 6.1 percent.

Meanwhile, the average fixed 30-year mortgage rate fell from 3.26 percent to record low 3.19 percent.

“Purchase activity remains relatively strong, despite the continued economic uncertainty and high unemployment caused by the ongoing pandemic,” noted Joel Kan, MBA’s associate vice president of economic and industry forecasting.

FXStreet reports that the Credit Suisse analyst team notes that EUR/JPY has cleared key resistance at 122.13, as currently sits around 122.30, to confirm a base to see the core trend turn higher again for an eventual move back to the 124.44 June high.

“EUR/JPY strength has continued after holding key price support at 120.32/27 for the expected break above pivotal resistance from the top of the sideways range of the past month at 121.96/122.13. This sees the looked for base established to see the core trend turn higher again with resistance seen next at the 61.8% retracement of the June fall at 122.48/51. Whilst a pause here should be allowed for, a break in due course can see resistance next at 123.52/62 and eventually the 124.44 June high.”

“Big picture, with our broader outlook for the EUR higher we look for a move above here in due course also, with resistance then seen next at 125.94 – the 50% retracement of the 2018/2020 downtrend.”

“Near-term support moves to 121.97, then 121.78, with 121.48/46 now ideally holding to keep the immediate risk higher. A break can see a retreat back into the range with support then seen next at 121.22, then 120.75.”

"I am hearing there will be positive news soon (perhaps tomorrow) on initial trials of the Oxford Covid-19 vaccine that is backed by AstraZeneca and supported by tens of millions of pounds of government money," reports ITV political editor Robert Peston. "Apparently the vaccine is generating the kind of antibody and T-cell (killer cell) response that the researchers would hope to see." The first data are reported to be published in the Lancet.

• That is our ambition but I don't know if it is possible
• EU recovery fund should be based on loans, not grants

eFXdata reports that  MUFG Research flags a scope of disappointment on reaching a timely agreement on the EU recover Fund at the EU Summit on Friday.

"In our outlook for a stronger EUR, we have assumed that the EU will reach a timely agreement on the EU Recovery Fund thereby providing an important foundation for the recent rally to extend higher...The case for stronger euro would be reinforced further if EU Leaders reach a timely compromise agreement on an EU Recovery Fund which does not significantly water down initial proposals," MUFG notes. 

"However, a lack of progress and/or watering down of proposals still poses some downside risks in the week ahead,"MUFG adds.

FXStreet reports that AUD/USD break above 0.7005 would see a breakout from the near-term consolidation range with next resistance seen at 0.7032, per Credit Suisse sources. 

“AUD/USD has sharply reverted back higher from key support at 0.6922/21 as expected, maintaining the bull ‘triangle’ continuation pattern, with the market now testing above the upper end of its consolidation range at 0.7005.”

“We keep our bias to the upside and look for a closing break above 0.7005 in due course, removal of which would see a breakout from the nearterm consolidation range, with resistance seen thereafter at the more important 0.7032/63 highs, where we would expect the market to take a breather at first. Above here in due course would see the ‘neckline’ to the 2019 top at 0.7076 and the 78.6% retracement of the 2019/2020 fall at 0.7092 next.” 

“Support is initially seen at 0.6980, then 0.6962, ahead of 0.6922/21, which ideally continues to hold. Below here would negate the bullish pattern to see the rangebound environment extend further, with support seen next at 0.6902/00, which then ideally holds if reached.”

According to the report from Istat, in June 2020 the rate of change of Italian consumer price index for the whole nation (NIC) was +0.1% on monthly basis and -0,2% with respect to June 2019 (the same as in may), confirming the flash estimate.

The second consecutive month of decrease on annual basis of All items index was mainly due to the confirmation of the wide decreases of prices of both Regulated (-14.1%) and Non-regulated energy products (-11.2%). On the contrary, prices of Food including alcohol still grew clearly, speeding up Unprocessed food (from +3.7% to 4.1%) and slightly slowing down Processed food including alcohol (from 1.7% to 1.2%). Also Tobacco (+3.0%) and Services – miscellaneous (+1.4%) increased of prices by over one percentage point.

Core inflation (excluding energy and unprocessed food) was +0.7% (down from +0.8% in the previous month) and inflation excluding energy was +0.9% (from +1.0% in the previous month).

The increase on monthly basis was mainly due to the increase of prices of Services related to transport (+2.2%) mainly due to the usual seasonal factors.

Prices of Grocery and unprocessed food decreased by 0.6% on monthly basis and increased by 2.1% on annual basis (down from +2.4% in the previous month).

In June 2020 the rate of change of the Italian harmonized index of consumer prices (HICP) was zero with respect to the previous month and equal to -0.4% on annual basis (down from -0.3% in the previous month), confirming the flash estimate.

In the second quarter of 2020, the rate of change of HICP was -0.5% for the households with less purchasing power and was zero for those with greater spending power, confirming, in a context of general slowdown of inflation, the difference between the two groups that was registered in the last quarter of 2019.

FXStreet reports that Lee Sue Ann, Economist at UOB Group, suggested the Federal Reserve could implement Yield Curve Control (YCC) at the September meeting.

“The Fed has demonstrated it will do whatever it takes, beyond interest rate cuts and asset buying, to restore financial market stability, smooth out US dollar funding conditions and safe-guard the economy.”

“Going forward, we expect the Fed to keep its rates near 0% until at least 2022 and the next move will be to introduce Yield Curve Control (in Sep) to make monetary policy even more accommodative.”

FXStreet reports that USD/JPY slides below the 107.00 level as the 107.42 resistance remains intact. The pair faces next support at 106.65, as Credit Suisse’s analysts note.

“USD/JPY remains capped at its downtrend from early June, 13 and 55-day averages and price resistance at 107.32/42.”

“Whilst low conviction the immediate risk is seen staying marginally lower whilst below here with support seen at 107.15/11 initially and with a move below 106.65 needed to clear the way for a retest of the lows from May and June and ‘neckline’ support at 106.12/105.98. Beneath here would see the completion of an important top to mark a more significant and concerted turn lower with support then seen next at 105.20/14 – the 61.8% retracement of the March rally.” 

“Above 107.42 would see the downtrend break to see the trend shift neutral again. Only back above 107.80 would reassert an upward bias for a move back to the early July high at 108.17.”

Reuters reports that Silvana Tenreyro – one of the Bank's nine Monetary Policy Committee (MPC) members - said Britain's economic recovery from the coronavirus lockdown would probably be hindered by consumers remaining wary of the virus, social distancing rules curbing activity and unemployment rising.

"Behavioural responses mean that the UK economic outlook will continue to depend on the global and domestic spread of COVID-19," Tenreyro said.

"Assuming prevalence gradually falls, my central case forecast is for GDP to follow an interrupted or incomplete 'V-shaped' trajectory, with the first quarterly step-up in Q3."

FXStreet reports that EUR/GBP is down  today as the pair takes a breath from its recovery towards the five-month resistance line at 0.9124. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, notes EUR/GBP advances gradually since April and expects a move above the 0.9178 June high to target the 0.9323 mark.

“EUR/GBP’s recovery rally from the current July low at 0.8931 is taking it towards the five-month resistance line at 0.9124. Above it beckons the June peak at 0.9178.” 

“A move above the 0.9178 June high would trigger a rise to 0.9323. It is the location of the 78.6% Fibonacci retracement.”

“Below this week’s low at 0.8931 lies the June low at 0.8864.”

Reuters reports that China said on Wednesday it will take all necessary measures to safeguard its interests following Britain's decision to purge all Huawei Technologies Co Ltd equipment from its 5G network by the end of 2027.

Chinese foreign ministry spokeswoman Hua Chunying told reporters that China strongly opposes Britain's decision and said the decision was driven by the politicization of commercial and technological issues and not by national security.

Bloomberg reports that German Chancellor Angela Merkel said she’s prepared to compromise in difficult talks on assembling a European recovery plan this weekend in Brussels, as Spanish Prime Minister Pedro Sanchez urged leaders to reach an accord at the meeting.

“There are still different opinions to overcome,” Merkel told reporters in Berlin alongside Sanchez. “But from the German side, we will go to Brussels with a certain reserve of compromise.”

Sanchez was more forceful, saying that Spain would do everything in order to forge an accord this month, insisting that leaders do not delay a resolution. “July must be the month of decisions,” the Spaniard said.

Sanchez’s visit to Merkel follows that of Italy’s Giuseppe Conte on Monday, during which the German and Italian demonstrated a common line in favor of a proposed 750 billion-euro ($855 billion) recovery plan. A handful of member states are voicing concern over the proposal’s cost.

EU leaders will gather in Brussels on Friday for the first time since the pandemic swept the continent. On the table is a recovery fund backed by Germany and France intended as a show of solidarity to nations hit hardest by the illness, such as Italy and Spain.

Dutch Prime Minister Mark Rutte, who is spearheading the resistance to the proposal, reiterated his demand for stronger conditions tied to EU grants, telling members of parliament on Tuesday that he is “somber” about the upcoming summit.

Rutte stressed the need for a governance structure that could monitor reforms and “if that governance is in order, that could be a road to subsidies,” adding that he doesn’t yet see that road.

During today's Asian trading, the US dollar declined moderately against the euro and yen. The Chairman of the Federal reserve bank of St. Louis, James Ballard, on Tuesday announced the prospects of a strong economic recovery and a significant reduction in the unemployment rate in the next six months. "If those who define themselves as "temporarily laid off" just go back to work in the next six months and nothing else changes, the official unemployment rate will fall to 4.5%, " he said.

Federal Reserve Member of the Board of Governors Lael Brainard, in turn, warned that the economic recovery is likely to "face some restraining factors" and will require further easing of monetary policy.

Meanwhile, president of the Federal Reserve Bank of Philadelphia Patrick Harker said on Tuesday that "we are in a crisis that is both extremely severe and long-term."

The Central Bank of Japan left the interest rate on deposits of commercial banks at -0.1% per annum, the target yield of ten-year government bonds of Japan - about zero. In a quarterly report, the Bank of Japan said that the economic situation is likely to gradually improve in the second half of the year, but the pace of recovery is expected to be only moderate amid the continuing impact of the COVID-19 pandemic in the world.

Consumer prices in the UK in June 2020 increased by 0.6% in annual terms, according to data from ONS. Thus, inflation accelerated compared to may's 0.5%. Experts expected a slowdown in consumer price growth to 0.4%.

The ICE Dollar index, which shows the value of the dollar against six major world currencies, fell by 0.15% relative to the previous trading day.

FXStreet reports that FX Strategists at UOB Group believe USD/CNH could slip back to the 6.9500 level in the next weeks.

24-hour view: “We highlighted yesterday that USD ‘could test the 7.0200 resistance’ but held the view that ‘a sustained advance above this level is not expected’. USD subsequently touched a high of 7.0254 before dropping back down to close at 7.0122. The weak price action after opening this morning has resulted in a quick pick-up in momentum and from here, barring a move above 7.0150, USD could decline further but the prospect for a break of last week’s low at 6.9815 is not high (6.9950 is already quite a strong support).”

Next 1-3 weeks: “In our previous update from last Tuesday (07 Jul, spot at 7.0150), we highlighted that USD ‘is under pressure’. We added, ‘a daily closing below 6.9950 could potentially lead to further sharp loss’. USD subsequently dropped to a low of 6.9815 on Thursday (09 Jul) before closing at 6.9970. USD rebounded last Friday (10 Jul) and while downward momentum has been dented, only a break of 7.0390 (‘strong resistance’ level previously at 7.0550) would indicate that the current downside risk has dissipated. Until then, USD could weaken further to 6.9650 with lower odds for extension to 6.9500. Meanwhile, oversold shorter-term conditions could lead to a few days of consolidation.”

CNBC reports that the Chinese yuan is set to see a sizable appreciation against the greenback in the next 12 months, according to Zach Pandl, co-head of global foreign exchange, rates and emerging market strategy at Goldman Sachs.

Pandl forecasts the Chinese currency could hit 6.70 per dollar in the next 12 months, “primarily through the health of the Chinese economy.”

“I think the domestic picture in China actually looks pretty solid,” the strategist told CNBC’s “Squawk Box Asia.” He said the country is seeing a “pretty good rebound” from the shock of the coronavirus pandemic.

The earliest reported cases of the virus were found in China. Authorities in the country swiftly put in place lockdown measures to curb the disease’s spread, denting the economy in the process. Data releases out of the country have been watched by investors for clues surrounding the recovery of China’s economy.

“The only thing holding us back really from enthusiasm around the currency is tensions with the United States ahead of the November election,” Pandl said.

“If I could set those aside, and I think when you look 12 months ahead you can look through that to some degree,” he added. “I think it actually does look like a pretty reasonable outlook for the yuan here.”

Looking at the downside risks ahead for the Chinese currency, Pandl said there were two factors that he was focused on.

The first was the situation surrounding the coronavirus, the strategist said.

“I think we need to recognize that the U.S. dollar is a safe-haven and tends to go up against almost all currencies when the global economy’s turning over,” Pandl said. “If we find out that we don’t really have the virus under control, we’re going back into a double-dip recession ... that would be major risk for all our currency forecasts.”

The second factor Pandl cited was the relationship between Beijing and Washington ahead of elections stateside in November.

“President Trump has expressed unhappiness with Chinese policy on a variety of fronts and that could result in policy measures, and certainly some statements from the U.S. side ahead of the November election,” he said.

RTTNews reports that the Bank of Japan maintained its massive monetary policy stimulus on Wednesday as the economy is expected to contract more sharply in the current financial year due to the challenges posed by the novel coronavirus.

The Policy Board of the BoJ voted 8-1 to retain the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.

The bank will continue to purchase necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

The bank will actively buy exchange-traded funds and Japan real estate investment trusts so that their outstanding amounts will increase at annual paces with the upper limit of about JPY 12 trillion and JPY 180 billion, respectively.

As for CP and corporate bonds, the bank will maintain their outstanding amounts at JPY 2 trillion and JPY 3 trillion, respectively.

The economy is forecast to improve gradually from the second half of the year with economic activity resuming, but the pace is expected to be only moderate while the impact of the novel coronavirus remains worldwide, BoJ said.

The bank observed uncertainty posed by the covid-19 is extremely high. It is highly unclear how the pandemic will evolve and how long it will take to subside, the banks said.

According to the quarterly outlook report, the economy will contract 4.7 percent in this fiscal year ending March 2021. In April, the bank had forecast a fall somewhere between 3 percent and 5 percent.

Thereafter, the economy is projected to expand 3.3 percent in next fiscal year and 1.5 percent in the fiscal 2022. Earlier, the bank had forecast 2.8 percent to 3.9 percent growth in 2021 and 0.8 to 1.6 percent in FY 2022.

Consumer prices are expected to fall 0.5 percent in the fiscal 2020. In April, prices were expected to drop between 0.3 and 0.7 percent.

The bank projected consumer prices to rise 0.3 percent in the next fiscal and 0.7 percent in the fiscal 2022.

According to the report from Office for National Statistics, the Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month inflation rate was 0.8% in June 2020, up from 0.7% in May 2020.

The largest contribution to the CPIH 12-month inflation rate in June 2020 came from recreation and culture (0.32 percentage points).

Rising prices for games and clothing resulted in the largest upward contributions to the change in the CPIH 12-month inflation rate between May and June 2020.

Falling prices for food resulted in a partially offsetting downward contribution to the change.

As a result of the ongoing coronavirus (COVID-19) pandemic, we identified 67 CPIH items that were unavailable to UK consumers in June, as detailed in Table 58 of the Consumer price inflation dataset; these account for 13.5% of the CPIH basket by weight and made a downward contribution of 0.02 percentage points to the change in the CPIH 12-month rate; the number of unavailable items is down from 74 in May and 90 in April; for June, we have collected a weighted total of 84.0% (excluding unavailable items) of the number of price quotes collected for February (the most recent "normal" collection).

The Consumer Prices Index (CPI) 12-month rate was 0.6% in June 2020, up from 0.5% in May.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1487 (5853)

$1.1465 (1778)

$1.1448 (1734)

Price at time of writing this review: $1.1398

Support levels (open interest**, contracts):

$1.1345 (84)

$1.1323 (426)

$1.1295 (247)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date August, 7 is 53850 contracts (according to data from July, 14) with the maximum number of contracts with strike price $1,1400 (5853);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2749 (1780)

$1.2685 (1372)

$1.2638 (654)

Price at time of writing this review: $1.2576

Support levels (open interest**, contracts):

$1.2423 (308)

$1.2391 (1140)

$1.2355 (1516)

Comments:

- Overall open interest on the CALL options with the expiration date August, 7 is 18989 contracts, with the maximum number of contracts with strike price $1,3000 (3032);

- Overall open interest on the PUT options with the expiration date August, 7 is 18722 contracts, with the maximum number of contracts with strike price $1,2400 (1516);

- The ratio of PUT/CALL was 0.99 versus 1.02 from the previous trading day according to data from July, 14

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.